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On the Money With Maria Bartiromo

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Maine 12, Us 6, U.s. 5, Phil Mickelson 3, Mexico 3, Maria Bartiromo 3, Dana Cowin 2, United States 2, Dana 2, L.a. 2, New York 2, Los Angeles 2, Dan 2, Mcmillan 1, Lowe 1, Mike Duke 1, Rob Walton 1, Facebook Maria Bartiromo 1, Bill Simon 1, Housing Data 1,
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  CNBC    On the Money With Maria Bartiromo    News/Business. Perspectives on market  
   conditions and investment advice. (CC) (Stereo)  

    August 25, 2013
    7:30 - 8:01pm EDT  

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hi, everybody. welcome to "on the money." i'm maria bartiromo. coming to you today from outside the new york stock exchange a massive glitch brings trading to a halt for hours at the nasdaq. what went wrong and what does it mean to your money. a rare interview with the ceo of the world's largest retailer and the company that employs more people than anybody else. we'll talk jobs, the economy, and the consumer with walmart ceo mike duke. and why lobster mann men are feeling the pinch this year but you're still paying full price for that tasty crew station. we'll crack open the case on the lobster. "on the money" begins right now. this is america's number one financial news program, "on the
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money." now, maria bartiromo. >> here's a look what's making news as we head into a new week. abrupt halt to trade at the nasdaq on thursday. the entire exchange shut down for about three hours due to an unidentified software glitch. there's no word yet on exactly what caused the problem but securities could not be priced at all. and there was no response from nasdaq officials before and during the halt. on the cause of the problem. the next day, nasdaq omx ceo bob g guy feld defended the problem. >> we took the am of time, the testing was done. the communication was so strong, we got that communication done and we came back and came back successfully. so it's not our job nor will it be for us to go on the press, you know, to the press, to the public while we focus on the issue. >> in spite of that the nasdaq composite was up more than 1% on thursday. the dow had a good day as well, breaking the longest losing streak on the year, six days of
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losses. the markets continued to climb on friday. the federal reserve's open market committee released minutes from july meeting and investors were hope for clarity on when the fed would begin to slow done the bond buying program. they were mostly disappointed. as a split fed provided few clues about just when that would happen. some big names in retail reporting earnings this week. home depot beat earnings expectations an rised frooft as did rival lowe's. staples fell short, as did sears and jcpenney. microsoft ceo steve ballmer is stepping down and will retire within 12 months but will continue on the job until the new leader for the company is found. microsoft shares jumped on the news. a frozen market, some fed speak, and questions about tapering. what does it all mean to your money? joining me right now to talk about it dan greenhouse, chief global strategist and andy cross, chief ingestment officer at the motley fool. good to have you. thanks for joining us. dan, let me kick this off with
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you. the flash freeze, the nasdaq, halts trading for three hours because of a tech kl glitch. what kind of an impact do you see this happving on the consum, on the retail investor? >> i think the larger issue here that's getting lost t in the communication debate and the technical glitches is this idea is that at the end of the day is what happens at the stock market, what happens in the capital markets is the essence of democracy, of capital lymph. this is where companies go to tap investors to grow to hire, to invest. and obviously you're doing damage in terms of sentiment but at the same time if you lose faith in the stock market, you are, in essence, losing faith in capitalism. >> yeah. and that's why the retail investor has stepped away. isn't that right? >> well, i think there is a little bit to that. we've seen a lot of these issues, whether it's a facebook ipo, the flash crash, recently bubble up. on top of the financial crisis. i think some individual investors tend to say, hey, what's going on with all of the big money going on the new york? >> listen, the whole idea that they shut down the market, they
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stopped trading across all exchanges to not impair the retail investors -- >> it happens. >> it happens. but at the same time the main criticism and other commentators have pointed this out is can you really go three hours without saying anything? >> all right. let's look at the markets meanwhile. the federal reserve, of course, releasing the minutes from the last fed meeting. everybody was looking forward to it for any clarity on when the fed would start the tapering. start slowing down the bond buying program. and they really didn't get any. >> yeah. >> did that surprise you? >> it didn't surprise me to much. i think a lot of uncertainty both in the world and in the economy as well. we're seeing that on the fmoc, too. and we saw that in the minutes. i did say that that report seemed to be more dour than i thought. so i know there's been some talk about some side of the boards wanting to go with a september action with pulling back on some of the bond purchases and some saying, no, we have to wait to see what happens. there are mixed numbers just this week. look at the housing data. new home sales and existing home
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sales, very evident what's going on in the market. >> frankly, do you think we could see tapering happening in september? the next two-day meeting is september 17th. >> the most important point to make is that the fed has actually moved private sector sentiment in that direction. the fed does a sort of insider survey so to speak, and right now the insiders that are surveyed think the fed is going to reduce purchases by 15 billion in september. the private market is already there. >> we had the dow had its longest losing streak this week. six days of declines. is this just a late summer swoon? do you think this is a bigger -- the beginning of a bigger correction to come? what do you think is happening? or should we not care because it's the end of august? >> listen. right now all the talk is whether or not the stock market and the economy can handle higher interest rates. my favorite talking point is 13 months ago the yield on the ten year was about 1.3, 1.4%. today it's 2.8, 2.9%. it's effectively doubled over the last 13 months. the stock market supposed somewhere between 22 and 23%
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over that same time frame. i think we've had a terrific run here. yields have reprised partially as a result of the federal reserve. the question right now is this large of a larger thing. the most important point is august and september are never really a particular strong period of time for the stock market and after the run that we've had, some period of digestion is perfectly normal and should be expected. >> what should a a retail investor do right now? >> i still like retail investor to be individual inverse vesters to be long in this market. i think ultimately the me yags with the fed works out biological weapon do have short-term uncertainty with all the things you mentioned, maria, with the sequestration and the fu fed governor coming in. >> buy individual stocks or ho dow you do it? >> there are some really good -- i think we have some bargains. the s&p 500 as a whole isn't horribly expensive still, especially after a pullback. the u.s. markets, companies in the u.s. that are operating in the u.s. look really well positioned to be able to continue to grow. >> what about you, what's the plan? >> the first caveat is everybody
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is investment horizon and schedule is different. that said, listen, to the point, what you want to look at is companies that are going to perform over a period of time and whether the government has issues in september or not ultimately shouldn't change the path of a given company's course of earnings. the first thing is you have to look at near-term turbulence. look through it and look at the companies you like that are going to do well no matter the environment. we had a terrible economic environment in several years. any number of stocks are up 1100, 200, 300, 400 event. a lot of companies from doing quite well. >> true. >> we'll leave it there. dan, good to have you on the program. andy. >> andy cross joining me. up next "on the money," walking in walmart shoes, the ceo 6 of the largest retailer will join me and the nation's largest employer. we'll talk hiring and selling to the nation's middle class, and prices for lobster off the coast of maine is at new depths.
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we are looking at the impact on one of summer's top flay vors and we'll get a taste of one small business bringing new england to the rest of the country. as we take a break, we'll look at how the stock market ended the week.
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welcome back. super retailer walmart known fot roll back but so far this year those everyday low praises have not been enough to sustain growth in the u.s. or international stores. why has this $466 billion company struggled when the economy seems to be improving at least a bit. what's its strategy for raising profits as we head to the ultracompetitive back to school and holiday seasons. i sat down with walmart ceo mike duke who shared with me what's happened to the middle class
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consumer. >> the customer clearly is under a lot of pressure. i think the economic pressure from the payroll tax, i think the concern about fuel prices, about jobs, employment, all of this puts a little bit of a cloud on the consumer. >> what are you expecting from back to school and from the holidays? >> so i do think they'll continue to be pressure. i think the overall consumer spending in the united states and, frankly, around the world will be under pressure through the back to school and through the holiday season, but i think where customers can see value and quality and their needs be met, then those retailers will do really well. >> what about competition? in an environment where you are seeing people stressed and stretched, are you seeing the dollar stores take market share at this point? >> wherever i'm at and -- across the united states, i drop in and visit competitors. so i have great respect for all competitors. we can see that we continue to gain market share and feel good about that. >> this company has always been
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about operating for less, selling for less because of different labor laws, because of different wages. are you having a tougher time selling for less international? >> actually, we have had great success in the markets that we've been in for a number of years where we have implemented our everyday low price practice is where we have great success. so, for example, mexico, canada, the uk, our business, those emerging markets, the customer still want edlp. >> minimum wage, a lot of people expecting it to go up again. it seems like it could be two sided. if the minimum wage goes up it helps your customers, maybe they'll spend more. but it also forces you to pay more. >> huh sgluf what's the impact to walmart? >> the story of walmart with our people, it's not the pay to start, it's the opportunity. as you probably know, i think less than 1% of our associates make the minimum wage. the vast majority of our associates are paid more than
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this. >> let me turn my attention to -- our attention to mexico. walmart, of course, reported hi higher than expected expenses in the international division. this, of course, the bribery charges in mexico. $73 million in the first quarter. more than expected. $82 million in the second quarter. on top of the $155 million to implement the compliance program. a lot of expectations. more to come in the third quarter. what should investors expect? should they expect these kinds of outflows for several quarters to come? >> well, first, the investigation itself and the timing, i really can't comment on because it's an investigation under way. what i can say and a portion of this investment is in the area of compliance, to do the right thing. and every market that we operate in, so we have invested in people and processes and systems to ensure that every market that we operate in, that we do it the right way. >> are heads going to roll? is anybody going to get fired
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over this? >> we will take the appropriate action, but it would be premature to discuss anything about the future. >> increasingly companies shifting full-time workers to become part-time workers because of the expense of obamacare. you initially backed obamawear but then last year in december you said you, too, would no longer ensure part-time workers. how much of the burden was the rising cost of health care. explain this to us. >> and i'll clarify. back a number of years ago we actually said before there was the affordable care act that the current system of health care was not sustainable and we still believe that. but we've been working on this now for a number of years so the affordable care act really doesn't have the significant impact because we already meet the test for affordability, for quality of what the act requires. >> mike, one of the issues that came up with some of the investors that i was talking to and i was prepare for this interview is your succession, the company has identified two people that perhaps could be your successor, bill simon who
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runs the u.s., doug who runs international, mcmillan. have you discussed the issue of succession with your board? >> i think every responsible public board at every board meeting should be discussing succession and, of course, walmart has a very mature board. our chairman rob walton and other members. so succession is an ongoing -- i think when i first joined the board of directors it was discussed then and it's discussed at every board meeting continually. >> will you announce your retirement this year? >> you can tell i love what i'm doing, so that's not the topic of today's discussion. i'm highly energized. >> my thanks to mike duke of walmart. up next "on the money," lobster is claug its way to the top of the culinary world while the fresh stuff is priced at record lows. economics of lobster is the main thing when we come back. and find us on facebook/maria bartiromo.
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welcome back. hey, did you know lobster is on a roll, both at the market and as a business trend. as wholesale prices in maine, the nation's largest lobster harvesting state, plunged to as low as $2 a pound. does that leave consumers paying luxury prices to get pinched? dana cowin is editor and chief of "food and wine." thank you so much for joining us. we have so much stuff to go throu
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through. tell us what's first behind the fact that lobster prices have really come down quite a bit and the impact that that has had on the consumer industry. this guy wants to travel, okay? he just scares me for a second. >> comes from maine and wants to go back home, i think. >> he's on the move. so how come lobster prices have gone down so much? >> lobster prices have gone down because there's a lot of lobster but that actually is a good thing. it means that the traps have been maintained sustainably. >> even though lobster prices have come down because there's a glut of lobsters, it not being passed on to the consumers. still very expensive to order a lobster dish. what's the infrastructure that makes menu prices different? >> well, the infrastructure would be did you buy the lobster whole, right, because then you had -- the way that it got to you, it took a long trip. just like this little lively good. >> they're all on the move. they know something is happening here. they don't like having their claws tied up. oh, my god. all right. i want to bring in jim jim kell
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kiss and say lynn lo mack. guys, good to have you on the program. >> thanks. >> how does it work, in light of this increased lobster harvest happening in maine that dana is talking about? >> you know, it's been -- it's a real test m to the state of main and the industry. the regulations that they have in place that has created this sustainable product which now, you know, they're certainly having morelanding. but there's a lot that goes on between the live lobster that comes out of the ocean in maine and then ends up in the lobster roll. you know, comes off the dock, goes to the processing plants. and then it's cooked, picked, processed, and packaged. >> tell me a bit about your business. you were featured on the show "shark tank." >> yeah. >> i love that. which gave you both capital and customers. you're looking at more growth. >> right now we started 15 months ago with one truck in los angeles. we're currently building our third truck we have a little
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brick and mortar in pasadena. we ship online. we ship to every state. everything comes from maine. anything from fresh lobster meat, live lobster, lobster pot pies, lobster mac and cheese. >> no beer yet. >> we were trying to ship beer. >> this is just dana's accompaniment, right? >> exactly. i feel like the air is perfect with lobster. why overthink it. >> absolutely. >> make it simple for yourself and get a lobster that is on the label. >> how is the falling price of lobster impacting your business? i mean, you know, dana is talking about the fact that there's a glut of lobster and yet it's not being passed on. >> just as she was saying earlier. it is really that infrastructure that exists between landing the live lobsters and getting it to the fresh meat. we sent fresh meat to los angeles. >> it is a testament to sustainability in maine that the fishermen, the lobstermen go through. 80% of the landings they throw back. if it is a pregnant female, if it's a small, adolescent or very large male, they're going to
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throw those back so they keep producing more and more lobsters so we have more amazing maine lobsters. >> yeah. and are you seeing lobster be as popular as it always has been? are you seeing the demand there? >> in l.a.? >> yeah. >> it's crazy. >> really? >> literally, it's been so nice to bring our native maine lobster to l.a. people love it. feedback is phenomenal. we sell it for a lot less than they do out here in new york. >> you noticed that, did you? >> yeah. >> there are lobster roll wars. i'm sure you know. people who are really passionate, is the roll buttered, what happens to the lobster, is it tossed in butter, is it tossed in mayo. >> great questions. >> let's do it. these are our traditional two rolls. we have the traditional maine roll in the front and little mayonnaise, new england style roll, lightly toasted. my favorite. jimmy and i argue over this. this is called a connecticut roll. fresh type of meat, all from maine. saute in a little butter, a little lemon. it's kind of like when you're ripping that lobster and eating
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it, nice and warm. the butter is all over your face. staining your shirts. no bibs, just dirtying up. that's my favorite. this is our most popular item. >> it looks excellent. should we squeeze some lemon on that? >> let's do it. everyone has to grab a lemon, though. >> team up. >> lemon that baby up. >> one, two, three. >> okay. wahoo! >> oh, yeah. >> we get to drink the beers? >> this is great, guys. thank you for joining us. dana cowin and cousins maine lobster. thank you so much. happy summer to you. up next, take a look at the news this upcoming week that will have an impact on your money. and golfer phil mickelson will join me. the game and just how much winnings are taxed.
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for more on our show and our guests check out the website otm.cnbc.com. follow me on twitter and on google plus. just look for@maria bartiromo. first though here's a look at the storieses coming up in the week ahead that may move the markets and impact your money this upcoming week. on monday we will see how u.s. manufacturing is doing with the release of durable goods orders for the month of july. on tuesday, the s&p case-shiller home price index will be out. that also for the month of june. that is due out. wednesday is the 50th anniversary of the march on washington. dr. martin luther king jr.'s "i have a dream" speech. on thursday, the second estimate for the second quarter gdp is due. typically a market mover. and then on friday, billionaire investor warren buffett celebrates his 83rd birthday.
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happy birthday to warren. golfer phil mickelson meanwhile recently won the british open cementing his financial success in golf. i spoke too him from the site of the barclays pga tournament about an interesting side effect to being among the world's greatest golfers, the 60% tax bill on his winnings. >> it's tough to talk about because nobody wants to be incensensitiv insensitive, nobody wants to be insensitive, a tough time where a lot of people are having a hard time with work. i have a chance to spend time with ceos, a lot of them who are quality individuals having a hard time hiring right now because of so much uncertainty going on in the financial world with whether it's taxes, whether it's the health care, whether it's all the obligations that are placed on the employers. so it's not making me want to go out and work harder. >> would you actually leave the country? >> oh, no, no. i love this place. a lot of people thought i grew up in a country club. i didn't. i grew up in a family that was lower middle class. we did fine.
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but i wanted to play golf and i didn't have the opportunity. i didn't have a club to go practice at. you know what i did? i went down to the local municipal course. i got a job picking up range balls three times a week. for that i was able to play and practice. if i had the strong enough will and desire to achieve it, i was able to fulfill my dreams of playing on the pga tour. i don't know what other country allows those great opportunities. >> my thanks to phil mickelson. that's the show for today. thanks so much for joining me. my geks next week, labor secretary tom for rperez as we celebrate labor day. this is the guy who's graduating ready for a great career in technology.
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>> across this country, small businesses are closing their doors, killing dreams and costing tens of thousands of jobs. i'm here to fix this business. my name is marcus lemonis. in the past ten years, i've bought hundreds of failing businesses, turned them around, and i've made millions doing it. i'll write whatever check i need to, even if you won't. if you want people to listen, you put money on the table. i'm gonna give you a check for $500,000. i found six struggling businesses, some weeks away from closure. my plan is to turn them around. for the next week, i'm 100% in charge. >> all right. >> let's go get to work. can't run a business if it's not clean. but i'm not just giving them

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